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Dividend Declared treatment in financial statement

Dividend declared means declared by the shareholders in annual general meeting. And AGM happens after the financial statement gets approved by board & gets audited by auditor And we prepare financial statement on 31st March Then how dividend Declared can be accounted in that financial year ?

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Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

25-Feb-20 12:11

93

Answers (6)

Dividend is recognized when it is finalized by all the sharesholders in AGM as per As9 Revenue recognition concept


Gaurav ojha

Gaurav ojha

CA Inter

300

26-Feb-20 09:37

In the current financial year company treats dividend as a liability because it is payable by him to shareholders


Gaurav ojha

Gaurav ojha

CA Inter

300

26-Feb-20 09:40

But when the AGM takes place then on that date this dividend will be treated as actual expense and shown in profit and loss account


Gaurav ojha

Gaurav ojha

CA Inter

300

26-Feb-20 09:42

But at that time financial statement is already has been prepared  And adopted by the shareholders in AGM  After finalized how dividend declared in that AGM can be adjusted in adopted financial statement ?


Thread Starter

Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

26-Feb-20 16:06

Gaurav ojha

Dividend is recognized when it is finalized by all the sharesholders in AGM as per As9 Revenue recognition concept

AS 9 is for revenue recognition and not for the accounting of dividends being paid.


Suraj Lakhotia

Suraj Lakhotia

Admin

26-Feb-20 17:56

Dividends declared on AGM (Say in September 2019) will be accounted as dividend in financial year 2019-20. The concept of provision for dividend no longer exists. Dividend is accounted only when approved - by BOD in case of interim dividends and by Shareholders in AGM in case of Final dividend.


Suraj Lakhotia

Suraj Lakhotia

Admin

26-Feb-20 17:57

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